US Economy Is Basically 'Still In Recession': Fed's Evans

The U.S. economic outlook has "clearly" deteriorated this year, and the continued softness of economic indicators shows that the headwinds facing the country are even stronger than thought, Chicago Federal Reserve President Charles Evans said on Wednesday.

"Conditions still aren't much different from an economy still in recession ," Evans, speaking at a seminar in London said.

He said the Fedfaced significant challenges in overcoming the obstacles left behind by the financial crisis.

Evans, a voting member on the Federal Open Market Committee , said he believed central banks should focus on medium- rather than short-term inflation as many short-term effects such as fluctuations in food and energy prices were beyond policy makers' reach.

Given how "truly badly" the U.S. was doing on the jobs front, the Fed should consider more aggressive action, he said.

He did not explicitly call for more quantitative easingor bond purchases but called for "strong action."

"I argue that the Fed should seriously consider actions that would add very significant amounts of policy accommodation," he said. "Such further policy accommodation does increase the risk that inflation could rise temporarily about our long-term goal of 2 percent," he said.

The Fed Open Market Committee said in August that it would continue to keep its benchmark interest rate low for at least through mid 2013, acknowledging that the recovery it had hoped for had so far failed to take shape.

The Fed ended a $600 billion Treasury bond-buying program at the end of June.